John McGinnis fears the federal government may squelch prediction markets.

An obscure government agency will soon decide whether citizens can get hold of information essential to modern democratic decision making. On Monday, the Commodity Futures Trading Commission began to analyze whether to create a safe harbor for prediction markets in the U.S., as these markets would otherwise be hamstrung by the strictures of financial trading laws. The CFTC should create the safe harbor. . .

Federal and most state laws do not generally prohibit gambling, even when the events themselves, like the outcomes of horse races, have no public benefits. Congress should therefore take the additional action of exempting prediction markets from online gambling prohibitions.

It's too bad we do not yet have the prediction market to tell us whether it is likely that the CFTC and Congress will do the right thing.

Gambling is a prediction market. There's no valid distinction between the two. What you are saying here is you think gambling on the outcome of some kinds of events should have a special privelege over gambling on the outcome of events like horse races or dice rolls. There's no legitimate basis for claiming that gambling over "important" things isn't gambling, still less so for exempting the things you personally think are important from a law which is on its face neutral. Who are you to say that horse racing and sports aren't important enough to deserve prediction markets? They get more public attention than many events you personally would prefer.

Agencies and courts should follow the law. If the law should be changed to exempt some things but not others, this is possible, but it is the business of legislatures.

The futures markets were originally created to serve two purposes: price discovery for commodities and allowing commodities producers to hedge against price fluctuation in the future. The current misuse of financial futures has to stop, but the markets are not just for "gambling."